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Horizon Technology Finance Announces Third Quarter 2020 Financial Results
Third Quarter 2020 Highlights
- Net investment income of
$5.9 million , or$0.34 per share, compared to$5.8 million , or$0.42 per share for the prior-year period - Total investment portfolio of
$311.8 million as ofSeptember 30, 2020 - Net asset value of
$205.2 million , or$11.17 per share, as ofSeptember 30, 2020 - Annualized portfolio yield on debt investments of 15.1% for the quarter
- Funded four loans totaling
$16.0 million during the quarter - Raised total net proceeds of approximately
$12.7 million with "at-the-market" ("ATM") offering program - Experienced liquidity events from five portfolio companies
- Cash of
$56.9 million and credit facility capacity of$196.8 million as ofSeptember 30, 2020 - Held portfolio of warrant and equity positions in 68 companies as of
September 30, 2020 - Undistributed spillover income of
$0.45 per share as ofSeptember 30, 2020 - Subsequent to quarter end, declared distributions of
$0.10 per share payable in January, February andMarch 2021
"We generated net investment income of
"We also remain focused on proactively and aggressively managing our portfolio," continued
Third Quarter 2020 Operating Results
Total investment income for the quarter ended
The Company's dollar-weighted annualized yield on average debt investments for the quarter ended
Net expenses for the quarter ended
Net investment income for the quarter ended
For the quarter ended
For the quarter ended
Portfolio Summary and Investment Activity
As of
($ in thousands) |
For the Three Months Ended |
For the Nine Months Ended |
||
2020 |
2019 |
2020 |
2019 |
|
Beginning portfolio |
$ 355,880 |
$ 274,759 |
$ 319,551 |
$ 248,441 |
New debt investments |
16,094 |
42,147 |
121,648 |
135,284 |
Less refinanced debt investments |
— |
(7,500) |
— |
(17,500) |
Net new debt investments |
16,094 |
34,647 |
121,648 |
117,784 |
Investment in controlled affiliate investment |
— |
589 |
— |
589 |
Principal payments received on investments |
(6,419) |
(3,413) |
(20,344) |
(13,069) |
Early pay-offs |
(43,542) |
(25,000) |
(90,785) |
(70,548) |
Accretion of debt investment fees |
795 |
1,131 |
3,080 |
2,879 |
New debt investment fees |
(202) |
(658) |
(1,415) |
(1,764) |
New equity |
— |
240 |
— |
240 |
Warrants received in settlement of fee income |
— |
— |
978 |
— |
Proceeds from sale of investments |
(1,945) |
(506) |
(8,200) |
(2,411) |
Dividend income from controlled affiliate investment |
— |
461 |
118 |
1,223 |
Distributions from controlled affiliate investment |
— |
(185) |
— |
(715) |
Net realized gain (loss) on investments |
1,178 |
(444) |
3,945 |
(3,891) |
Net unrealized (depreciation) appreciation on investments |
(10,288) |
(143) |
(16,827) |
2,622 |
Other |
199 |
41 |
1 |
139 |
Ending portfolio |
$ 311,750 |
$ 281,519 |
$ 311,750 |
$ 281,519 |
Portfolio Asset Quality
The following table shows the classification of Horizon's loan portfolio at fair value by internal credit rating as of
($ in thousands) |
|
|
|
||||||||
Number of |
Debt |
Percentage |
Number of |
Debt |
Percentage |
Number of |
Debt |
Percentage |
|||
Credit |
|||||||||||
4 |
5 |
$ 67,893 |
22.7% |
2 |
$ 23,539 |
6.9% |
4 |
$ 45,339 |
15.7% |
||
3 |
21 |
198,841 |
66.5% |
25 |
265,365 |
77.4% |
26 |
216,128 |
75.0% |
||
2 |
3 |
12,752 |
4.3% |
6 |
46,718 |
13.6% |
3 |
24,888 |
8.6% |
||
1 |
5 |
19,400 |
6.5% |
2 |
7,100 |
2.1% |
2 |
2,000 |
0.7% |
||
Total |
34 |
$ 298,886 |
100.0% |
35 |
$ 342,722 |
100.0% |
35 |
$ 288,355 |
100.0% |
As of
As of
Liquidity and Capital Resources
As of
As of
Additionally, as of
During the three months ended
As of
Liquidity Events
During the quarter ended
In August,
In August, Celsion Corporation ("Celsion") prepaid
In August, Horizon received proceeds of
In September,
In September, Mustang Bio, Inc. ("Mustang Bio") prepaid its outstanding principal balance of
Net Asset Value
At
For the quarter ended
Stock Repurchase Program
During the quarter ended
Monthly Distributions Declared in Fourth Quarter 2020
On
Monthly Distributions
Ex-Dividend Date |
Record Date |
Payment Date |
Amount per Share |
|
|
|
|
|
|
|
|
|
|
|
|
Total: |
|
After paying distributions of
When declaring distributions, the Horizon board of directors reviews estimates of taxable income available for distribution, which may differ from consolidated net income under generally accepted accounting principles due to (i) changes in unrealized appreciation and depreciation, (ii) temporary and permanent differences in income and expense recognition, and (iii) the amount of spillover income carried over from a given year for distribution in the following year. The final determination of taxable income for each tax year, as well as the tax attributes for distributions in such tax year, will be made after the close of the tax year.
Subsequent Event
On
Conference Call
The Company will host a conference call on
A webcast replay will be available on the Company's website for 30 days following the call.
About
Forward-Looking Statements
Statements included herein may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Horizon's filings with the
Contacts:
Investor Relations:
ICR
ir@horizontechfinance.com
(860) 284-6450
Media Relations:
ICR
HorizonPR@icrinc.com
(646) 677-1819
Consolidated Statements of Assets and Liabilities |
|||||
|
|
||||
2020 |
2019 |
||||
(unaudited) |
|||||
Assets |
|||||
Non-affiliate investments at fair value (cost of |
$ 304,359 |
$ 294,304 |
|||
Non-controlled affiliate investments at fair value (cost of |
7,391 |
8,597 |
|||
Controlled affiliate investments at fair value (cost of |
— |
16,650 |
|||
Total investments at fair value (cost of |
311,750 |
319,551 |
|||
Cash |
34,130 |
6,465 |
|||
Investments in money market funds |
22,735 |
9,787 |
|||
Restricted investments in money market funds |
801 |
1,133 |
|||
Interest receivable |
6,229 |
5,530 |
|||
Other assets |
1,913 |
1,535 |
|||
Total assets |
$ 377,558 |
$ 344,001 |
|||
Liabilities |
|||||
Borrowings |
$ 163,689 |
$ 152,050 |
|||
Distributions payable |
5,510 |
4,669 |
|||
Base management fee payable |
510 |
519 |
|||
Incentive fee payable |
1,465 |
1,613 |
|||
Other accrued expenses |
1,213 |
1,095 |
|||
Total liabilities |
172,387 |
159,946 |
|||
Commitments and contingencies |
|||||
Net assets |
|||||
Preferred stock, par value |
— |
— |
|||
Common stock, par value |
19 |
16 |
|||
Paid-in capital in excess of par |
260,649 |
226,660 |
|||
Distributable earnings |
(55,497) |
(42,621) |
|||
Total net assets |
205,171 |
184,055 |
|||
Total liabilities and net assets |
$ 377,558 |
$ 344,001 |
|||
Net asset value per common share |
$ 11.17 |
$ 11.83 |
|||
Consolidated Statements of Operations (Unaudited) |
||||||||
For the Three Months Ended |
For the Nine Months Ended |
|||||||
|
|
|||||||
2020 |
2019 |
2020 |
2019 |
|||||
Investment income |
||||||||
Interest income on investments |
||||||||
Interest income on non-affiliate investments |
$ 10,974 |
$ 8,974 |
$ 32,286 |
$ 25,429 |
||||
Interest income on affiliate investments |
175 |
210 |
532 |
645 |
||||
Total interest income on investments |
11,149 |
9,184 |
32,818 |
26,074 |
||||
Fee income |
||||||||
Prepayment fee income on non-affiliate investments |
1,156 |
639 |
1,911 |
1,373 |
||||
Revenue-based payments on non-affiliate investments(1) |
— |
1,050 |
— |
1,080 |
||||
Fee income on non-affiliate investments |
23 |
37 |
1,112 |
382 |
||||
Fee income on affiliate investments |
3 |
4 |
10 |
18 |
||||
Total fee income |
1,182 |
1,730 |
3,033 |
2,853 |
||||
Dividend income |
||||||||
Dividend income on controlled affiliate investments |
— |
461 |
118 |
1,223 |
||||
Total dividend income |
— |
461 |
118 |
1,223 |
||||
Total investment income |
12,331 |
11,375 |
35,969 |
30,150 |
||||
Expenses |
||||||||
Interest expense |
2,607 |
2,046 |
7,331 |
6,209 |
||||
Base management fee |
1,616 |
1,394 |
4,865 |
4,055 |
||||
Performance based incentive fee |
1,465 |
1,443 |
4,212 |
5,352 |
||||
Administrative fee |
234 |
212 |
740 |
631 |
||||
Professional fees |
247 |
279 |
1,095 |
1,045 |
||||
General and administrative |
302 |
228 |
877 |
688 |
||||
Total expenses |
6,471 |
5,602 |
19,120 |
17,980 |
||||
Performance based incentive fee waived |
— |
— |
— |
(1,848) |
||||
Net expenses |
6,471 |
5,602 |
19,120 |
16,132 |
||||
Net investment income |
5,860 |
5,773 |
16,849 |
14,018 |
||||
Net realized and unrealized loss on investments |
||||||||
Net realized gain (loss) on non-affiliate investments |
1,178 |
(424) |
3,957 |
(3,871) |
||||
Net realized loss on controlled affiliate investments |
— |
— |
(12) |
— |
||||
Net realized gain (loss) on investments |
1,178 |
(424) |
3,945 |
(3,871) |
||||
Net unrealized (depreciation) appreciation on non-affiliate investments |
(10,629) |
(129) |
(15,435) |
620 |
||||
Net unrealized appreciation (depreciation) on non-controlled affiliate investments |
341 |
— |
(1,134) |
2,019 |
||||
Net unrealized depreciation on controlled affiliate investments |
— |
(14) |
(258) |
(17) |
||||
Net unrealized (depreciation) appreciation on investments |
(10,288) |
(143) |
(16,827) |
2,622 |
||||
Net realized and unrealized loss on investments |
(9,110) |
(567) |
(12,882) |
(1,249) |
||||
Net (decrease) increase in net assets resulting from operations |
$ (3,250) |
$ 5,206 |
$ 3,967 |
$ 12,769 |
||||
Net investment income per common share |
$ 0.34 |
$ 0.42 |
$ 0.98 |
$ 1.08 |
||||
Net (decrease) increase in net assets per common share |
$ (0.19) |
$ 0.38 |
$ 0.23 |
$ 0.98 |
||||
Distributions declared per share |
$ 0.30 |
$ 0.30 |
$ 0.95 |
$ 0.90 |
||||
Weighted average shares outstanding |
17,245,662 |
13,816,082 |
17,111,359 |
13,016,839 |
(1) |
Revenue Based Payments consist of payments made to the Company by a portfolio company based upon a percentage of such portfolio company's revenue. Such payments were made in addition to the portfolio company's regularly scheduled payments of principal and interest. |
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